Aetna terminates $120 million Ingenix class action settlement
The APA Practice Organization (APAPO) has just learned that Aetna is exercising its right under the Ingenix settlement agreement to terminate the settlement because too many class members with large claims “opted out” of the settlement. APAPO had no prior warning from Aetna or the settlement administrator that the insurance company would make this unusual move.
This breaking development relates to the $120 million settlement of class action lawsuit claims against Aetna by an estimated class of 20 million providers, including psychologists, and Aetna subscribers. APAPO provided support to the New Jersey Psychological Association (NJPA), a named plaintiff in the case.
The class action alleges that Aetna used the Ingenix database to systematically underpay providers for out-of-network services. APAPO had provided members with guidance about filing claims related to this settlement by the March 28 filing deadline.
If you have not yet submitted your claim to the Aetna settlement fund:
You should not submit a claim. But be aware that a new settlement may eventually be reached with Aetna. If you have gathered information or documentation supporting your claim, you should save that material for use in any later settlement with Aetna.
If you have already submitted your claim to the Aetna settlement fund:
Unfortunately, we expect that this settlement will be terminated and that no related claims will be paid. We regret that some members have spent time preparing and submitting settlement claims. If you have done so, we suggest that you save all of your claim forms and documentation for use in any later settlement with Aetna.
Further Information on Aetna’s Termination of the Settlement
Plaintiffs first learned of Aetna’s intention to cancel the settlement when the company filed its Notice of Termination of Settlement Agreement just before the hearing scheduled for March 18, 2014 — where we hoped the New Jersey federal court judge would grant final approval to the settlement.
Aetna relied on a provision in the settlement agreement allowing it to back out if the combined claims of class members who “opted out” reached $20 million. Opting out means that class members forego compensation under the settlement so that they can bring direct individual claims against the company. They do so in an attempt to secure a greater recovery than they would receive under the settlement. The provision on which Aetna relied is common in class action settlement agreements but rarely invoked by defendants.
We anticipate the New Jersey federal court will not preclude Aetna from terminating the agreement after the plaintiffs’ attorneys review data that Aetna provided to substantiate its right to terminate. Meanwhile, the parties have begun discussing a schedule for resuming the lawsuit.
APAPO will continue supporting the New Jersey Psychological Association, a plaintiff in this class action, and its counsel in prosecuting claims on behalf of the nationwide class that includes psychologists who provided out-of-network services to Aetna subscribers. We will keep you apprised of any significant developments as the case progresses.